Nokia Buys Navteq for $8.1 Billion

October 1st, 2007 at 12:00 am
 


Nokia maps

Nokia is buying NavTeq GPS for 8.1 billion clams.  Nokia is as we all know the godfather of all mobile phones today accounting for about one third of all the mobile phones in the world. NavTeq on the other hand is the technology behind Mapquest, some of Google Earth, and most of the in-car GPS navigation systems in the world as well.

The price tag of $8.1Billion dollars puts each stock at $78 which is great for the stockholders of Navteq since this is a 34% profit from last month.  Though it may seem Nokia wanted NavTeq for themselves, Nokia will still let NavTeq service their existing customers but of course with the addition of Nokia Maps.

This move is not a surprise from the Nokia side, since the release of the iPhone, Nokia has been overshadowed and sales have begun to slip a little bit.  NavTeq is to provide Nokia with the edge they need to compete directly and effectively with the eye candy iPhone.

Om Malik of GigaOm reports: "’Location-based services are one of the cornerstones of Nokia’s Internet services strategy,’ said Olli-Pekka Kallasvuo, Nokia’s president and CEO. ‘By joining forces with NAVTEQ, we will be able to bring context and geographical information to a number of our Internet services with accelerated time to market.’" 

Apparently, maps on cell phones are what people want and by 2010, 250million GPS enables phones will be shipping out.  According to Google VP Marissa Mayer, their Google Maps usage soared  when the iPhone arrived.

Of course, Nokia is also hoping that their phone unit sales soar when the NavTeq maps are in place.